[Federal Register Volume 87, Number 150 (Friday, August 5, 2022)]
[Notices]
[Pages 47964-47966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16851]



[[Page 47964]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security


Empresa de Transporte A[eacute]reocargo del Sur, S.A., a/k/a 
Aerocargo del Sur Transportation Company a/k/a EMTRASUR, Avenida 
Intercomunal, Edificio Sede, Sector 6.3, Maiquetia, Distrito Federal, 
Venezuela; Avenida Lecuna Torre Oeste Piso 49, Libertador, Caracas, 
Venezuela; Order Temporarily Denying Export Privileges

    Pursuant to Section 766.24 of the Export Administration 
Regulations, 15 CFR parts 730 through 774 (2021) (``EAR'' or ``the 
Regulations''),\1\ the Bureau of Industry and Security (``BIS''), U.S. 
Department of Commerce, through its Office of Export Enforcement 
(``OEE''), has requested the issuance of an Order temporarily denying, 
for a period of 180 days, the export privileges under the Regulations 
of Venezuela-based cargo airline Empresa de Transporte 
A[eacute]reocargo del Sur, S.A., a/k/a Aerocargo del Sur Transportation 
Company, a/k/a EMTRASUR (``EMTRASUR''). OEE's request and related 
information indicates that EMTRASUR is a subsidiary of Consorcio 
Venezolano de Industrias Aeronauticas Y Servicios Aereos, S.A., a/k/a 
CONVIASA (``CONVIASA''), a Venezuelan state-owned airline. On or about 
February 7, 2020, U.S. Department of the Treasury's Office of Foreign 
Assets Control (``OFAC'') added CONVIASA to the list of Specially 
Designated Nationals (``SDN'') pursuant to Executive Order (E.O.) 
13884.\2\
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    \1\ On August 13, 2018, the President signed into law the John 
S. McCain National Defense Authorization Act for Fiscal Year 2019, 
which includes the Export Control Reform Act of 2018, 50 U.S.C. 
4801-4852 (``ECRA''). While Section 1766 of ECRA repeals the 
provisions of the Export Administration Act, 50 U.S.C. App. Sec.  
2401 et seq. (``EAA''), (except for three sections which are 
inapplicable here), Section 1768 of ECRA provides, in pertinent 
part, that all orders, rules, regulations, and other forms of 
administrative action that were made or issued under the EAA, 
including as continued in effect pursuant to the International 
Emergency Economic Powers Act, 50 U.S.C. 1701 et seq. (``IEEPA''), 
and were in effect as of ECRA's date of enactment (August 13, 2018), 
shall continue in effect according to their terms until modified, 
superseded, set aside, or revoked through action undertaken pursuant 
to the authority provided under ECRA. Moreover, Section 1761(a)(5) 
of ECRA authorizes the issuance of temporary denial orders. 50 
U.S.C. 4820(a)(5).
    \2\ See https://home.treasury.gov/news/press-releases/sm903.
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I. Legal Standard

    Pursuant to Section 766.24, BIS may issue an order temporarily 
denying a respondent's export privileges upon a showing that the order 
is necessary in the public interest to prevent an ``imminent 
violation'' of the Regulations, or any order, license or authorization 
issued thereunder. 15 CFR 766.24(b)(1) and 766.24(d). ``A violation may 
be `imminent' either in time or degree of likelihood.'' 15 CFR 
766.24(b)(3). BIS may show ``either that a violation is about to occur, 
or that the general circumstances of the matter under investigation or 
case under criminal or administrative charges demonstrate a likelihood 
of future violations.'' Id. As to the likelihood of future violations, 
BIS may show that the violation under investigation or charge ``is 
significant, deliberate, covert and/or likely to occur again, rather 
than technical or negligent[.]'' Id. A ``lack of information 
establishing the precise time a violation may occur does not preclude a 
finding that a violation is imminent, so long as there is sufficient 
reason to believe the likelihood of a violation.'' Id.

II. OEE's Request for a Temporary Denial Order (``TDO'')

    OEE's request is based upon facts indicating that EMTRASUR engaged 
in conduct prohibited by a BIS-issued temporary denial order (``TDO'') 
against Iranian airline Mahan Air a/k/a Mahan Airlines a/k/a Mahan 
Airways (``Mahan Air'') and the Regulations by acquiring custody and/or 
control from Mahan Air of a U.S-origin Boeing 747 aircraft bearing 
manufacturer's serial number 23413 (``MSN 23413''), an item subject to 
the EAR and classified under ECCN 9A991. In or around October 2021, 
Mahan Air transferred custody and control of MSN 23413 to EMTRASUR's 
parent company, CONVIASA, through an intermediary. Open source 
evidence, including flight tracking data, reveals the aircraft, which 
was operating under Iranian tail number EP-MND, has now been painted in 
EMTRASUR's livery and logo and bears Venezuelan tail number YV-3531.
    Mahan Air has been on BIS's Denied Persons List since March 2008, 
due to numerous significant, continuing, deliberate, and covert 
violations of the Regulations. The BIS-issued TDO against Mahan Air 
(``Mahan Air TDO'') has been renewed on or about every six months 
thereafter and remains in effect.\3\ Any named parties to the TDO, 
which further encompasses any related parties, agents, representatives 
or those acting for or on their behalf, are broadly prohibited from 
directly or indirectly participating ``in any way'' in a transaction 
involving U.S.-origin commodities or those subject to the EAR. The TDO 
also prohibits third-parties from engaging in a broad range of conduct 
subject to the Regulations with denied persons.
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    \3\ Mahan Airways' status as a denied person was most recently 
renewed by BIS through a TDO issued on May 12, 2022. See 87 FR 
30,173 (May 18, 2022). The May 12, 2022 renewal order summarizes the 
initial TDO issued against Mahan in March 2008, and the other 
renewal orders prior to May 12, 2022. See id.
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    Since October 2011, Mahan Air also has been designated as a 
Specially Designated Global Terrorist (``SDGT'') by OFAC pursuant to 
Executive Order 13224 for providing financial, material and 
technological support to Iran's Islamic Revolutionary Guard Corps-Qods 
Force (IRGC-QF). See 77 FR 64,427 (October 18, 2011).
    In addition to the prohibited conduct arising from EMTRASUR 
acquiring custody and/or control of the aircraft from Mahan Air, 
EMTRASUR's continued use of MSN 23413 on flights into Iran and Russia 
runs afoul of General Prohibition 10, which (among other restrictions) 
prohibits the continued use of an item that was known to have been 
exported or reexported in violation of the EAR. See General Prohibition 
10 of the EAR at 15 CFR 736.2(b)(10). Moreover, there are no license 
exceptions available for this General Prohibition.\4\ Specifically, 
OEE's investigation, including publicly available flight tracking 
information, indicates that EMTRASUR operated MSN 23413 on flights into 
and out of Tehran, Iran and Moscow, Russia. The information about those 
flights includes the following:
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    \4\ Section 736.2(b)(10) of the EAR provides: General 
Prohibition Ten--Proceeding with transactions with knowledge that a 
violation has occurred or is about to occur (Knowledge Violation to 
Occur). You may not sell, transfer, export, reexport, finance, 
order, buy, remove, conceal, store, use, loan, dispose of, 
transport, forward, or otherwise service, in whole or in part, any 
item subject to the EAR and exported or to be exported with 
knowledge that a violation of the Export Administration Regulations, 
the Export Administration Act or any order, license, License 
Exception, or other authorization issued thereunder has occurred, is 
about to occur, or is intended to occur in connection with the item. 
Nor may you rely upon any license or License Exception after notice 
to you of the suspension or revocation of that license or exception. 
There are no License Exceptions to this General Prohibition Ten in 
part 740 of the EAR.

[[Page 47965]]



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                                                                      Departure/arrival
             Tail No.                 Serial No.     Aircraft type          cities                 Dates
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YV-3531...........................           23413        747-300M  Caracas, VZ/Tehran,    February 19, 2022.
                                                                     IR.
YV-3531...........................           23413        747-300M  Caracas, VZ/Tehran,    March 13, 2022.
                                                                     IR.
YV-3531...........................           23413        747-300M  Caracas, VZ/Tehran,    April 17, 2022.
                                                                     IR.
YV-3531...........................           23413        747-300M  Caracas, VZ/Tehran,    May 21,2022.
                                                                     IR.
YV-3531...........................           23413        747-300M  Tehran, IR/Moscow, RU  May 24, 2022.
YV-3531...........................           23413        747-300M  Moscow RU/Tehran, IR.  May 25, 2022.
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    BIS has become aware that, on or about June 6, 2022, MSN 23413 
landed at Ezeiza International Airport in Buenos Aires, Argentina. On 
or about June 8, 2022, MSN 23413 departed to Uruguay to refuel. But 
Uruguay refused to grant MSN 23413 access to its airspace due to its 
association with multiple sanctioned entities. That same day, on or 
about June 8, 2022, MSN 23413 landed a second time at Ezeiza 
International Airport in Buenos Aires, Argentina. After MSN 23413 
landed a second time, the Government of Argentina temporarily detained 
the aircraft. Based upon the on-going violations by EMTRASUR, and the 
potential release of the MSN 23413 from detention, there are heightened 
concerns of future violations of the EAR, especially given that any 
subsequent actions taken with regard to MSN 23413 may violate the EAR. 
Such actions include, but are not limited to, refueling, maintenance, 
repair, or the provision of spare parts or services. Id.

III. Findings

    Under the applicable standard set forth in Section 766.24 of the 
Regulations and my review of the entire record, I find that the 
evidence presented by BIS convincingly demonstrates that a violation of 
the Mahan Air TDO occurred in connection with Mahan Air's transfer of 
custody and/or control of MSN 23413 to EMTRASUR in or about October 
2021. EMTRASUR also took subsequent actions in apparent violation of 
the Regulations by operating the aircraft on flights into Iran as well 
as flights into Russia after February 24, 2022, without the required 
BIS authorization. Moreover, the continued operation of MSN 23413 by 
EMTRASUR, and the company's on-going need to acquire replacement parts 
and components, many of which are U.S.-origin, presents a high 
likelihood of imminent violations warranting imposition of a TDO. I 
further find that the violations under investigation have been 
``significant, deliberate, covert and/or likely to occur again, rather 
than technical or negligent[.]'' Therefore, issuance of the TDO is 
necessary in the public interest to prevent imminent violation of the 
Regulations and to give notice to companies and individuals in the 
United States and abroad that they should avoid dealing with EMTRASUR 
in connection with export and reexport transactions involving items 
subject to the Regulations and in connection with any other activity 
subject to the Regulations.
    This Order is being issued on an ex parte basis without a hearing 
based upon BIS's showing of an imminent violation in accordance with 
Section 766.24 and 766.23(b) of the Regulations.

IV. Order

    It is therefore ordered:
    First, Empresa de Transporte A[eacute]reocargo del Sur, S.A., a/k/a 
Aerocargo del Sur Transportation Company, a/k/a EMTRASUR, Avenida 
Intercomunal, Edificio Sede, Sector 6.3, Maiquetia, Distrito Federal, 
Venezuela, and Avenida Lecuna Torre Oeste Piso 49, Libertador, Caracas, 
Venezuela, and when acting for or on its behalf, any successors or 
assigns, agents, or employees may not, directly or indirectly, 
participate in any way in any transaction involving any commodity, 
software or technology (hereinafter collectively referred to as 
``item'') exported or to be exported from the United States that is 
subject to the EAR, or in any other activity subject to the EAR 
including, but not limited to:
    A. Applying for, obtaining, or using any license (except directly 
related to safety of flight), license exception, or export control 
document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the EAR except directly related to 
safety of flight and authorized by BIS pursuant to Section 764.3(a)(2) 
of the Regulations, or engaging in any other activity subject to the 
EAR except directly related to safety of flight and authorized by BIS 
pursuant to Section 764.3(a)(2) of the Regulations; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the EAR, or from any other activity subject to the EAR except directly 
related to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations.
    Second, that no person may, directly or indirectly, do any of the 
following:
    A. Export, reexport, or transfer (in-country) to or on behalf of 
EMTRASUR any item subject to the EAR except directly related to safety 
of flight and authorized by BIS pursuant to Section 764.3(a)(2) of the 
Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by EMTRASUR of the ownership, possession, or control of any 
item subject to the EAR that has been or will be exported from the 
United States, including financing or other support activities related 
to a transaction whereby EMTRASUR acquires or attempts to acquire such 
ownership, possession or control except directly related to safety of 
flight and authorized by BIS pursuant to Section 764.3(a)(2) of the 
Regulations;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from EMTRASUR of any item subject to the EAR 
that has been exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations;
    D. Obtain from EMTRASUR in the United States any item subject to 
the EAR with knowledge or reason to know that the item will be, or is 
intended to be, exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations; or
    E. Engage in any transaction to service any item subject to the EAR 
that has been or will be exported from the United States and which is 
owned, possessed or controlled by EMTRASUR, or service any item, of 
whatever origin, that is owned, possessed or controlled by EMTRASUR if 
such service involves the use of any item subject to the EAR that has 
been or will be exported from the United States except directly related 
to safety of flight and authorized by BIS pursuant to Section 
764.3(a)(2) of the Regulations. For purposes of this paragraph, 
servicing means installation, maintenance, repair, modification, or 
testing.

[[Page 47966]]

    Third, that, after notice and opportunity for comment as provided 
in section 766.23 of the EAR, any other person, firm, corporation, or 
business organization related to EMTRASUR by ownership, control, 
position of responsibility, affiliation, or other connection in the 
conduct of trade or business may also be made subject to the provisions 
of this Order.
    In accordance with the provisions of Sections 766.24(e) of the EAR, 
EMTRASUR may, at any time, appeal this Order by filing a full written 
statement in support of the appeal with the Office of the 
Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 
South Gay Street, Baltimore, Maryland 21202-4022.
    In accordance with the provisions of Section 766.24(d) of the EAR, 
BIS may seek renewal of this Order by filing a written request not 
later than 20 days before the expiration date. A renewal request may be 
opposed by EMTRASUR as provided in Section 766.24(d), by filing a 
written submission with the Assistant Secretary of Commerce for Export 
Enforcement, which must be received not later than seven days before 
the expiration date of the Order.
    A copy of this Order shall be provided to EMTRASUR and shall be 
published in the Federal Register.
    This Order is effective immediately and shall remain in effect for 
180 days.

    Dated: August 2, 2022.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2022-16851 Filed 8-4-22; 8:45 am]
BILLING CODE 3510-DT-P